Merrag Pty Ltd (in liq) & Anor v Khoury & Anor [2009] NSWSC 915

New South Wales Supreme Court

CITATION : Merrag Pty Ltd (in liq) & Anor v Khoury & Anor [2009] NSWSC 915

HEARING DATE(S) : 25 and 26 August 2009

JUDGMENT DATE : 8 September 2009

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Transaction held to be an unfair preference, uncommercial transaction and unreasonable director-related transaction.

CATCHWORDS : CORPORATIONS – INSOLVENCY – UNFAIR PREFERENCE – UNCOMMERCIAL TRANSACTION – UNREASONABLE DIRECTOR-RELATED TRANSACTION – Whether written contract for sale of property to director a sham – whether oral contract for sale made with director whereby purchase price would be offset by director's loan account with company – whether company insolvent at time of alleged oral contract – whether company insolvent at time of transfer of property to director – whether contract or later transfer to director in consideration of release of loan account constituted unfair preference, uncommercial transaction or unreasonable director-related transaction.

LEGISLATION CITED : - Conveyancing Act 1919 (NSW) – s.23C - Corporations Act 2001 (Cth) – s.95A, s.180, s.181, s.182, s.588FA, s.588FB, s.588FC, s.588FDA, s.588FE, s.588FF

CATEGORY : Principal judgment

- Aldridge Pty Ltd, G&M, v Walsh (2001) 203 CLR 662 - Aldridge Pty Ltd, G&M, v Walsh [1999] 3 VR 601 - Carydis v Merrag Pty Ltd [2007] NSWSC 1220 - Khoury v Khouri (2006) 66 NSWLR 241 CASES CITED : - Maddison v Alderson (1883) 8 App Cas 467 - Regent v Millett (1976) 133 CLR 679 - Sempill v Logan (1868) 7 SCR(NSW) 391 - Sempill v Vindin (1868) 7 SCR(NSW) 361 - Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387